Smart Specialization and entrepreneurial discovery · entrepreneurial discovery in a RIS3, ... entrepreneurial processes generate wealth and employment ... related variety.Mobility,

Smart Specialization and

entrepreneurial discovery

May 23rd 2013

Theory and reality behind the concept

Jaime del Castillo

INDEX OF CONTENTS

SMART SPECIALIZATION AND TERRITORY 1

ENTREPRENEURIAL DISCOVERY (I): Theoretical approach 2

3

4 CONCLUSSIONS AND RECOMENDATIONS

ENTREPRENEURIAL DISCOVERY(II): On field approach

INTRODUCTION 0

The concept: process and initiatives

Identification: discovering the discovery

RIS3: mechanisms for structural change

3

INTRODUCTION

Recently, a model of development has spread that answers the issues related to the actual competitive context throughout the search of smart specialisation of the territories.

This model has reached important relevance in the Regional European Policy ( ex ante conditionality for Structural Funds).

Importance of the “ENTREPRENEURIAL DISCOVERY” concept as key aspect of the model and its strategies.

1. Advance in the clarification of the concept of entrepreneurial discovery both in theoretical terms and on practical terms.

2. Establish a series of recommendations that, linked to the role of the entrepreneurial discovery in a RIS3, will allow those in charge to identify and support initiatives and processes in this field.

!

OBJECTIVE

However…

…important conceptual gaps….

4

SMART SPECIALIZATION AND TERRITORY

WHAT TO CHASE?

Constant innovation, as a process of combining ideas, experiences

etc., to generate new solutions that respond to needs and/or

market trends at international level

How to EXTENT AND SYSTEMATIZE these processes of

ENTREPRENEURIAL DISCOVERY?

Specialised diversification in time

POSSIBLE FOR ALL

REGIONS

5

SPECIALISED

DIVERSIFICATION

…through

ENTREPRENEURIAL

DISCOVERIES

GLOBAL

PERSPECTIVE

RELATED

DIVERSITY

SPECIALIZATION

What specialization characterises the region?

Those activities and/or technology domains to

prioritize as part of the bet to reach a

competitive advantage.

How is specialization inserted in a

global perspective?

Search of the differentiating elements

that, given the window of opportunities in

the global context constitute a

comparative advantage.

What if the range of the smart

specialization in the region?

The areas of specialization mean a

related variety which intersection

may house entrepreneurial

discoveries.

JOBS

WEALTH

+

+

SMART SPECIALIZATION as a

continuous process generator of

employment and wealth for the

territories.

THE MECHANISM OF THE

SPECIALISED DIVERSIFICATION How do the entrepreneurial discoveries

contribute to the process of smart

specialization?


6

The systematization of these innovations that throughout the

entrepreneurial processes generate wealth and employment

contributing to the economic development of the region, should be

the core of the RIS3:

How to generate elements of the environment that facilitate

and promote them.

How to discover/identify them through time,

How to identify the leaders of such processes and hidden

innovators that may shelter entrepreneurial discoveries, and

How to support them so that they consolidate and are

constituted as activities of the future.

HOW TO ACHIEVE IT? The importance of the process and its planning


7

ENTREPRENEURIAL DISCOVERY (I):

Theoretical approximation

“the creative combinations of different knowledge

(technological and/or no technological), transverse to various

economic sectors and that, from a window of opportunity,

generate a new market activity susceptible of being exploited

commercially, that contribute to a specialized diversification.”

What is entrepreneurial

discovery? (I) Foray, D., David, P.A., Hall, B. (2009)

RIS3 Guide. IPTS 2012

Who are those

entrepreneurs? Entrepreneurial in a “wide” sense and as result

of the interrelations between:

•Enterprises

•Associations and clusters

•Science and Technological

Parks

•Technological Centres

•Social Agents

•etc.

8



PROCESS

The entrepreneurial discovery may appear both in the “initiative” (the

opportunity already takes place) or in the “process” (the opportunity is already

latent) and the RIS3 should already act on both

INITIATIVE

It is already taking place, it has

been identified and the discovery is

being consolidated

It is latent, or is taking place but is

not identified or known as an

entrepreneurial discovery and goes

unnoticed.

“Hidden

innovators”

“Known

innovators”

Enterprises, entrepreneurs, etc. that

are known innovators at a national

and international level, that know

the support frames and have

access to them

Enterprises, entrepreneurs, etc. that

may contain entrepreneurial

discoveries without knowing and that

do not know the frames of support

and do not access them.

9



DOMAIN A

SECTOR 1

SECTOR 2

DOMAIN B

DOMAIN C

SECTOR

3

ENTREPRENEURIAL

DISCOVERY

ENTREPRENEURIAL

DISCOVERY PROCESS

(EDP)

ENTREPRENEURIAL

DISCOVERY

INNITIATIVE (EDI)

ENTREPRENEUR

Process of creative

combination linked to a

window of opportunity

“entrepreneur” in a wide

sense that includes whoever

is in the best position to

combine different solutions in

a creative way that will

generate a new market

opportunity

WINDOW OF

OPPORTUNITY

CO

ME

RC

IAL

IZA

TIO

N

EDI

CONSOLIDATION

NEW

ACTIVITY

CASE

STUDY

BUSSINES

MODEL

BUSSINES

STRATEGY

FINANTIAL

PLAN

ENTREPREEURIAL DISCOVERY How does it work?

10



CRITICAL POINTS KEY POINTS TO CARRY

OUT ASPECTS TO CONSIDER

Window of opportunity Do you have a clear market orientation at international

level?

Period of commercialisation at the short, medium and long term

Geographic reach: national, European or international

Regional helix Does the entrepreneur arises

and/or is supported by the quadruple helix?

Enterprises

R&D+i Agents

Government

Users

Technological hybridization

Do different knowledge/technology

domains combine?

Sector-Sector (Non technological innovation)

Sector-Technology

Technology-Technology (technological innovation)

Specialised diversification

Does it contribute to the diversification of the actual

regional specialization pattern?

Incremental Improvement

New product/service generator of new activities

CRITICAL POINTS of an entrepreneurial discovery What to search?

11



PHASES of an entrepreneurial discovery The “cycle of life” and its phases.

INITIATIVE of Entrepreneurial

Discovery (EDI)

FORMALIZATION of Entrepreneurial

Discovery (EDF)

The window of opportunity is

sensed as an idea that may be

moved to a business, due to the

combination of strengths and

opportunities.

Leaders of the process (generally

enterprises or R&D entities) look

for the necessary support of other

agents of the helix

The need of a development to

materialise the idea arises and it

requires the combination of

different solutions (technological

or not)

The formalization of the initiative

allows to commercialise the

possible applications in the

different scoped initially proposed

SPECIALISED

DIVERSIFICATION

TECHNOLOGICAL

HYBRIDIZATION

WINDOW OF

OPPORTUNITY

REGIONAL

HELIX

The project is developed

(investment, R&D, planning, etc.)

that allows to start setting the

process in a formal initiative

Other agents support the

discovery so that it can turn into a

formal entrepreneurial initiative

New agents are incorporated

(users, society etc) and they

complete the regional helix and

allow the initiative to consolidate.

It produces an initial estimation

of the extent the idea could have

in terms of new business niches

As the process formalises into an initiative the uncertainty about the window of

opportunity is reduced.

As the process initiative formalizes,

the uncertainty about the scope in

new niches reduces

PROCESS of Entrepreneurial

Discovery (EDP) PHASES 1 2 3

12

ENTREPRENEURIAL DISCOVERY (II):

Practical approximation

1. REDESIGNING actions ("retooling" or modernization of an existing activity)

would be based on the support of the improvement of the environmental assets

that act directly upon the competitiveness of such activity.

2. The actions oriented to the DIVERSIFICATION BY SYNERGIES ("emerging")

generate business by combining R&D and innovation and related business

activities.

3. The actions of ACTIVITY EXTENSION (“extending" or transition from an activity

to another new one) consist on the access to a new niche by exploiting

economies of scope.

4. The actions of RADICAL FOUNDATION ("cross-sectoral" or exploitation of

related variety generators of radical innovations) that are seen as new

combinations of sectors / technology domains that help generate innovative

ideas for new products and services.

TYPES OF ENTREPRENEURIAL DISCOVERY Paths for structural change through specialized diversification

13



The discovery process should consist on the identification of those activities in

which a territory should specialize leaving the leading role to "entrepreneurs”. The

role of governments should not consist on bureaucratically selecting areas of

expertise and boost the chosen development, but to facilitate environmental

conditions for it (Foray et al. 2009)

1. provide incentives to entrepreneurs and other organisations so that they

get involved with the discovery.

2. evaluate and value the effectivity of such support, so the the aids are

directed to economical sectors with a relevant weight and possibilities of

improvement;

3. provide with complementary investments of emerging specialisations

4. provide with information and facilitate the coordination and connections,

both between the different actors of the territory and between this and other

territories.

PAPER OF THE PUBLIC ADMINISTRATION What is expected from the public Administration as facilitator of the discovery?

14



LEGAL

FRAMEWORK

FINANTIAL

MECHANISMS

NON FINANTIAL

MECHANISMS

MIXED

MECHANISMS

Public Purchase

(innovating /

sustainable)

Employment

Legislation

Fiscal Legislation

Standardization

Microcredits

Capital risk

Collective Finance

Subsidies

Seed Capital

IPO (Initial Public Offer)

Credits

Bonus

Business angels Mezzanine

Corporate Venturing Incubators

Tech. Transfer Offices

Universities

Technological centres

Training Centres

BICs

S&T Parks

Development Agencies

Chamber of Commerce

Clusters

Business Associations

Advanced Services

Phases of an entrepreneurial discovery and

policies/mechanisms of support

PHASES 1 2 3 PROCESS of Entrepreneurial

Discovery (EDP)

FORMALIZATION of Entrepreneurial

Discovery (EDF)

INITIATIVE of Entrepreneurial

Discovery (EDI)

15

Case Study Region Type Typology Approach Characteristics

Route 1 2 3 4

CASE 1

Rural specialisation

Urdaibai Bird Centre

Basque Country

More developed -

Competitiveness

Initiative Territorial diversification

Strategy in rural territories

High High High High Radical

Foundation

CASE 2

Related variety:

metal + health

Basque Country

More developed -

Competitiveness

Process Reinventing a traditional activity towards emerging

technological niche

High Medium Medium High Emerging

CASO 3

Sectoral modernization:

Wealth + high tech

Castilla y León

More developed – Phasing-In

Initiative Access to a related niche

through enabling technologies

Medium Low Low Medium Extent

CASO 4

Exportation Redesign:

Food Technology

Extremadura

Less developed - Convergence

Formalization

Modernization of the

activity to increase

market share (outside)

Low Low Medium Low Redesign



Examples of entrepreneurial discoveries in 3 Spanish regions

16

Urdaibai Bird Centre UBC is

an Excellence Innovation

Centre (CIE), that favours the

exploitation of the Basque

related variety.

In it projects of technological

hybrization are generated

between different domains of

knowledge/activities, that

count with international

projection

The link of UBC to global

chains of value allow such

international projection.

EXAMPLE OF ENTREPRENEURIAL DISCOVERY (I)

Urdaibai Bird Centre – UBC – Basque Country

TOURISM

ELECTRONICS &

TELECOMUNICATIONS

RESEARCH AND

TRAINING

ENVIRONMENTAL

Climate change,

etc.

Mobility,

Geo-location,

Connectivity, etc.

Scientific tourism,

ecotourism, etc.

Mobility of

researchers,

knowledge transfer,

etc. Excellence

technological

hybridization projects



17

EXAMPLE OF ENTREPRENEURIAL DISCOVERY (II)

Technological hybridization metal + wealth – Basque Country

WORK TABLE (I)

PREVIOUS WORK: 2 months

FOLLOWING: 5 months

Identification of matching

23 assistants: 8 sanity + 15 metal

20 commercial contacts

4 collaborations

1 technology hybridation project (entrepreneurial discovery)

WORK TABLE (II): project groups

96% Want to participate

again



18

EXAMPLE OF ENTREPRENEURIAL DISCOVERY (III)

Santa María La Real Foundation –Castilla y León

Located at a rural area, with low critic mass, both

with a great historical and cultural heritage

HYBRIDISATION TECHNOLOGY

Application of ICTs to the cycle of life of the heritage:

study, restoration, conservation and diffusion

SPECIALIZED DIVERSIFICATION

Construction, energy efficiency, environment and

sustainability, tourism, health and well-being.

CUADRUPLE HELIX

Junta Castilla y León, Province, City, University,

Enterprises and Art Foundations

Recently launched by the Centre of Innovation and

Entrepreneurship “GIROLAB”



19

EXAMPLE OF ENTREPRENEURIAL DISCOVERY (IV) Centre for Export in the Meat Sector - Extremadura

Located on a convergence region (2014-2020), with

an agrarian economic structure

Application of ICTs to the field of food and food safety,

biotechnology and health

Farming, tourism, hospitality, health

Government of Extremadura, Ministry of

Economy and Competitiveness (MINECO),

ERDF, 19 partners and 50 collaborating

enterprises, University of Extremadura

(UEX)

Orientation to the export of high

added value + Pole of Excellence

on Food Innovation



HYBRIDISATION TECHNOLOGY

SPECIALIZED DIVERSIFICATION

CUADRUPLE HELIX

20

CONCLUSSIONS

1. Smart specialisation is not a list of technologies/sectors where the region

has an advantage, but a process of discovery subject to a cycle of life

(process-formalization-initiative) that varies in time according to the regional

capabilities and the varying environmental trends.

2. The fundamental core of smart specialization resides in the innovations that

arise from the creative combination of technologies and/or sectors

where the region has a high level of specialization/competitiveness and that

are generators of new business opportunities, employment and wealth

3. All regions, apart from their dominant sectors and their

technological/innovation capability, are potential hosts of these kind of radical

innovations, product of processes of entrepreneurial discovery. Smart

specialization is an useful way to approach territorial competitiveness.

21

CONCLUSSIONS

4. Entrepreneurial discovery does not respond to a unique pattern, nor

sectorial nor technological, but contrary to the random combinations (and

practically infinite) that result of the creative ways to take advantage of the

windows of opportunity and profiting of the assets that the territory has

available.

5. Entrepreneurial discovery can be identified in base to a series of

characteristics: specialised diversification, technological hybridization,

the role and compromise of the agents of the quadruple helix and the

window of opportunity to which it is directed.

6. A RIS3 must be capable of establishing the mechanisms to

identify/discover those innovations that through processes of

entrepreneurial discovery could end up turning into initiatives. The policy has

to support and consolidate the entrepreneurial initiatives, generating the

different aspects of an enabling environment.

7. The Administration must act as a facilitator of the conditions that generate

and systematize the entrepreneurial discoveries and as limitator of the

imperfections of the system (in those regions with less favourable

conditions).

Documents

Smart Specialization and entrepreneurial discovery · entrepreneurial discovery in a RIS3, ... entrepreneurial processes generate wealth and employment ... related variety.Mobility,